The Israel Electric Corporation has warned that it may perform intermittent West
Bank power supply cuts due to NIS 662-million worth of unpaid debts from
Palestinian electricity users.

Hisham Omari, CEO of the Jerusalem
District Electricity Company (JDECO), said he received a letter from the IEC
early on Tuesday afternoon, noting that his company alone owes the Israeli firm
NIS 423 million.

Should the Palestinian energy supplier not comply, the
IEC would implement scattered, temporary outages in areas within JDECO’s
jurisdiction – such as east Jerusalem, Bethlehem, Ramallah and Jericho – as well
as freeze the company’s assets in Jerusalem, Omari told The Jerusalem Post on
Tuesday.

In addition, if the areas need an increased electricity supply
or new, expanded transmission lines, the IEC would reject any such request, he
explained, quoting the letter.

“Every year, we have an increase in
consumption of 5- 10 percent, so we ask the Israeli company to increase its
connections with us,” Omari said.

While NIS 432 million of the total NIS
662 million in debt comes from within JDECO’s supply region, the remaining NIS
239 million is from a combination of the Gaza Strip and areas in the northern
and southern West Bank that fall outside JDECO’s realm and should come directly
from the Palestinian Authority, an IEC spokeswoman told the Post.

For his
company’s enormous debt, Omari largely blames both refugee camp residents who
refuse to pay their electricity bills and government bodies that have likewise
faltered on payments.

Within JDECO’s jurisdiction, there are about 12
refugee camps. Only about 5% of the residents of these camps actually pay their
electricity bills, however, and “there is a big amount of electricity theft
there and also in the villages,” according to Omari.

Electricity theft is
particularly rampant in villages within Area C, where no Palestinian police
force exists to patrol burglar activity, he explained.

Meanwhile, the PA
itself owes JDECO NIS 120 million for electricity bills in various government
buildings, schools, hospitals and water-pumping stations that it has failed to
pay.

“They suffer financially – they are not in good shape,” Omari
said. “Even this month, they are only paying 60% of the salaries to their
employees. This means that all employees might not be able to pay electricity
bills.”

Not only are the government bodies themselves not able to fulfill
their financial obligations to JDECO, but the employees who work for them – now
receiving fewer funds themselves – are also struggling to pay the bills in their
own homes.

Aiming to solve the escalating financial quandary, on Monday
night Palestinian Energy Authority chairman Omar Kittaneh spoke with IEC CEO Eli
Glickman, who agreed to postpone all legal procedures surrounding the situation
for two weeks, according to Omari. During this time period, however, the PA must
figure out how a certain sum of money will be transferred to the IEC. After the
two weeks, the parties will meet to determine exactly how to go about fixing the
monthly payments in the future, Omari said.

The NIS 239-million debt that
is outside JEDCO’s jurisdiction presents perhaps an even more complex
challenge.

According to economic agreements between Israel and the PA,
any income tax that Israel collects each month on behalf of the PA is supposed
to be transferred to the authority at the end of that month, Omari
explained.

Before transferring the total, though, Israel deducts
allocations for electricity, water, treatment in Israeli hospitals and other
Israeli services from the total it provides to the PA each
month.

Monthly, the Israeli government transfers approximately NIS 55
million of this deduction to the IEC for Gazan and northern and southern West
Bank electricity allowances, Omari said. Therefore, the residents themselves in
these regions are never actually directly paying for their electricity use. In
Gaza, while the Hamas government does also collect electricity bill fees from
its citizens, the government uses the money for its own purposes rather than
sending it to the PA Energy Authority, he explained. The entire Gaza Strip
therefore essentially receives electricity “free of charge,” he said.

The
JDECO region is exempt from these tax rules because the company – established by
the Greek in 1914 – officially resides in both Jerusalem and Ramallah, Omari
said, and therefore falls in both PA and Israeli jurisdictions. While JDECO
cannot legally expand its jurisdiction, the PA has already begun creating new
electricity companies to operate in the northern and southern West Bank, he
added.

As far as bridging the financial gaps with the IEC goes, Omari
said he holds the PA government predominantly responsible.

“If the
Palestinian Authority will not transfer money, [the IEC is] serious in its
letter, and maybe after two weeks we will see the electricity cut,” Omari said.
“Hopefully, the PA will take the matter seriously.”

In response to the
situation, the IEC reiterated to the Post that the combined debt of JDECO and
the PA stands at over NIS 600 million.

“Regarding the financial condition
of IEC, it cannot ignore such debts and therefore the company’s CEO has
requested to examine all options in order to collect the debt,” an IEC
spokeswoman said.

“So far no decision was made on the disconnections, but
this is one of the options being considered.”

Numerous attempts by the
Post throughout the day to reach the Palestinian Energy Authority chairman for
comment went unanswered.